Following Sirius XM’s (NASDAQ:SIRI) latest spin at guidance, is SIRI stock in a better position to strike a chord with bulls or bears? Let’s take a look at what’s happening on and off the price chart to reach a smarter, risk-adjusted determination.
One of the market’s original media disruptors, Sirius XM announced a mixed investor update on Tuesday. Highlighting the playlist for SIRI stock bulls, self-pay subscriber growth of 1.063 million topped the satellite radio company’s October guidance.
The account capture is a chart topper for Sirius, marking the company’s tenth-straight year of one million-plus self-pay additions. Also, the increase allowed Sirius XM to finish 2019 with a record breaking total paid subscriber base of 34.9 million.
Nice, right?
Sirius stock’s management offered additional trend affirmation, stating the company should meet or exceed its 2019 guidance for revenue, adjusted EBITDA and free cash flow when it reports its fourth-quarter and full-year results in early February. Looking ahead into 2020, the environment for SIRI stock appears mostly friendly with free cash flow nearing $1.7 billion and adjusted EBITDA of roughly $2.5 billion.
The Other Side of the Sirius Investor Update
Tuesday’s update wasn’t uniformly bullish, and SIRI stock bears were offered a short playlist of their own. Sirius XM’s forecast for self-pay net subscriber additions north of 900,000 in 2020 falls short of its friendly trend of the past ten years. Additionally, the 2020 revenue outlook for SIRI stock of approximately $8.1 billion is below Street consensus views of $8.25 billion.
With new findings in hand, Tuesday’s financial update has failed to produce a hit with either bullish or bearish SIRI stock investors. Shares of Sirius were off by a penny at $7.11 in Tuesday’s first-half. Nevertheless, listening to the longer-term SIRI stock price chart, the feeling is the hits are going to keep on coming.
SIRI Stock Price Monthly Chart
Before places like Spotify (NYSE:SPOT) or Facebook (NASDAQ:FB) ever rolled off the lips of investors, there was Sirius XM. The ten year-plus monthly view above is a testament to that fact.
Another unequivocal truth is SIRI stock’s long-standing uptrend. And, following shares common and healthy corrective cup-shaped base that’s developed since mid-2018, bulls are in position to charge higher in 2020 if Sirius XM shares breakout.
Still, it’s not the only possibility.
The upbeat outlook is akin to the A-side of a record, which everyone wants to listen to. The flip or B-side is that Sirius’ stock price isn’t a one-way technical street owned by subscribers of optimism.
For one, what the monthly doesn’t show is Sirius’ ugly decline since topping out around $66 per share in 2000. Closer to home, the bullish price pattern could always work its way into a double-top. And, with stochastics in an overbought position and starting to weaken, to simply write-off the possibility of a bearish outcome would be foolhardy.
For bulls favorably predisposed to Sirius’ price chart, I’d suggest using the monthly chart as your guide.
Final Thought on SIRI Stock
Buying shares above $7.20 on a breakout of December’s consolidation test of Sirius’ 62% retracement level looks approachable. On the upside, a conservative, measured move out of the base could eventually see SIRI stock fetching $10 a share. Alternatively, and if Sirius stock begins to falter, exiting slightly beneath December’s technical hold of support is a smart move off and on the price chart as well.
Investment accounts under Christopher Tyler’s management do not currently own positions in securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits
